Electrical energy costs have been rising and this trend is likely to continue as the energy industry moves towards higher cost energy storage systems for renewable energy generation resources and electrical distribution companies need to make new investments to upgrade the existing aging distribution infrastructure.
Many companies and organizations have already taken actions for reducing energy consumption costs. For example, many companies and organizations implement energy conservation programs to reduce energy waste. Such projects are often supported by government incentives.
To further reduce electrical energy operating costs, some operating facilities have enrolled in curtailment programs where they receive some financial benefit to reduce their energy consumption during peak demand periods. In such cases, the manufacturing facilities must cut back on their production levels to reduce their energy consumption. Even though there is a financial incentive to participate in the curtailment programs, the net effect is that some of these companies may suffer a loss due to the reduction in operating efficiencies when they decrease the production rates.
In some cases, some facilities that are planning to expand their production capacity run into the problem that the local distribution company is not able to increase the electrical feeder capacity to the plant to manage the new peak load due to restriction in the local distribution system. The net result is that the conventional electrical utility energy supply resources are becoming more constrained, costly and complicated to manage.